Comes the American Express statement in the mail, bearing good tidings. In only two more months, our annual rebate will be comin’ your way.
Here’s a strategy, we’re told, “to give yourself or your family something special from Costco”: use the holidays as an opportunity to buy, buy, BUY and charge it all up on your credit card!!!
Woo. Hooo. I can hardly wait to run out to the sales tomorrow and rack up several thousand dollars worth of debt, so I can get a few bucks back.
As practical matter, if you have one of these cash-back cards and you religiously pay off the balance every month, you don’t have to go out and spend yourself stupid during the holidays (or any other time) to get a nice kickback. I put all my budgeted discretionary spending on this card—that is, everything that is not a regularly recurring utility or insurance bill—and pay the entire balance promptly. AMEX says the rebate I’ve accrued so far is $276.04.
Nice. That will cover the cost of draining and refilling the pool. Merry Christmas!
The ghost of Christmas Present visits Ebenezer Scrooge
If you’re here to read “Truth” for FMF’s “March Madness” competition, please remember to vote at Free Money Finance’s site, not in the comments here. 🙂
Why, when we’re confronted, do we tend to blurt out the truth, even when it works to our disadvantage to do so? Chaucer had it right when he said “truth is the highest thing that Man may keep.” Sometimes we should keep it to ourselves.
Asked in the right way, we’ll often reveal private, sensitive information that’s strictly none of anyone’s business, that’s valuable to people trying to manipulate us into buying products and services, and that can be used to pester or even harass us, in some cases handing over Medicare and other personal information to convicted felons. Warranty cards with long lists of personal questions are especially egregious: what about your favorite sporting event and the magazines you read is needed to guarantee a flashlight’s performance? And how often do you give your phone number to companies that have no need to know it?
When my mother was young, back in the Early Pleistocene, she worked for the telephone company. Long-distance phone tolls were a pricey, money-making item, and people would try all sorts of scams to rip off a free call, ranging from disallowing calls they actually made to charging calls to someone else’s phone number. My mother’s job was to investigate claims of fraudulent charges. To get started, she would telephone the number that a customer said didn’t belong on a bill. When someone picked up the receiver, she would say she was calling from Pacific Bell and then quickly ask who called that number on thus-and-such a day at thus-and-such a time.
Incredibly, she said, about 90 percent of people would blurt out the truth. When you’re asked a question you don’t expect, point-blank, you’re likely to answer accurately even if the answer works against you.
In a general way, ethical people tell the truth. On the other hand, those who commit petty larcenies like stealing from the phone company are not ethical…and so why should they, by impulse, speak truthfully? It’s a deep-seated instinct, one that in the marketplace is too often used against us. Information we share for no other reason than that some stranger asks us is routinely sold to other merchandisers.
Yesterday when I went to get a flu shot at a grocery-store clinic, I was asked (among other things) for my e-mail address and telephone number. I left the e-mail address blank, figuring that if they pressed me I’d say I don’t have a computer or give them my junk gmail address. But under the mild stress of having to get another shot (I really do dislike injections of all kinds), I completely spaced the fake phone number I normally use in some circumstances. Well…actually, it occurred to me that if something was wrong with the vaccine they might need to call, so I gave my office number.
I immediately regretted it. The exception to the national Do-Not-Call Law allows companies that you do business with and all their subsidiaries to pester you with phone solicitation. So now I can expect nuisance phone calls not only from Dr. Mollen’s health-care enterprise, but from any other company even vaguely related to it.
Okay, I’m not advocating that we should routinely lie. However, I think when marketers try to extract private information for which they have no use other than to sell it or to sell something to you, you’re well within your rights to refuse to share it. And when pressed, to respond with disinformation. For example, I have a phony telephone number printed on my checks. No law says you have to tell a merchandiser the truth, nor is there any need for a retailer to have your phone number for no other reason than that you paid for a product with a check. If the check bounces, the bank will come after you.
Similarly, my Safeway club card bears my dog’s name and the telephone number of Safeway’s corporate offices.
Some retailers will themselves lie when you ask not to have a phone number used for solicitation. The first time I bought an appliance at Sears, the salesman asked for my number so the installer could call to make an appointment. I specifically stated that I did not wish to receive sales calls, and he specifically stated that my number would not be used for phone solicitation. He said he was entering a do-not-call note in the database. Within days, I was getting nuisance sales pitches from Sears. Requests that they take me off their list were ignored. It took weeks to get them to quit badgering me, and they only quit after I complained to a state consumer protection agency and the Better Business Bureau.
Image: Truth (1896). Olin Warner (completed by Herbert Adams). Left bronze door at main entrance of the Library of Congress Thomas Jefferson Building. Photo by Carol Highsmith. Public Domain.
Grrr! I think I just got jumped through the hoops for very little in return. At Costco I picked up a package of three air-conditioning filters for $39.99; mail in a rebate form (which asks for personal information such as your e-mail address and phone number) and they’ll send you a munificent three bucks, dropping the per-filter price to $12.33.
They’re high-quality filters, the nonallergenic electrostatic variety supposedly good for three months, reinforced well enough that they don’t foop up into the air-conditioning vent and form a giant concave toy whistle every time the AC unit comes on. But still.
In June of 2008, I bought two similar filters from Ace for $31.17, or $15.58 apiece; allowing for 3 percent inflation, today they might be expected to sell for $16.04. In other words, I used my time and my 44-cent stamp to save $11.13. Had I chosen not to kill time, compromise my ethics by lying about my phone number and e-mail address on their form, and use up a postage stamp, my savings over an Ace Hardware purchase still would have been $6.75—without the rebate.
Was it really worth the hassle to send in a rebate for three bucks, which I may or may not ever see?
Do you consider a mail-in rebate offer a strong enough come-on to persuade you to buy a product, or to prefer Product A (with rebate) over Product B (same price, no rebate)? Is there a limit on how small a rebate you’ll bother with?
Here in town, a chain of nurseries regularly advertises hot sales of trees, especially in the summer (heh heh…get it?). Because there are quite a few outlets, you can always find one relatively close to where you live, and they have a large selection. M’hijito and I are finally ready to landscape the long-neglected yard at the downtown house, and so we went over there to see if we could find a few xeric trees at a good price. What we found were a couple of salesmen whose high-pressure tactics rivaled the worst I’ve ever seen in a car dealership.
The first one to glom onto us was a fast-talking character who struck me as oily. Asked to show us a desert willow, a Sonoran emerald paloverde, and a Meyer lemon and to suggest one other shade tree, he schlepped us around to various peakèd-looking trees tagged with outrageous prices, given their modest size and poor condition. They wanted $250 for 24-inch trees; I’ve paid less for mature specimens in good shape. When the guy heard me say to M’hijito that the price was way too high, he started in on the pitch. We could, he exclaimed, get these fine trees for much less!
How much less?
Well, that depended on how many trees we bought. He would give us a price for all of them.
How much will you charge per tree?
He refused to say, insisting instead that we decide on the trees we wanted and then he would give us a batch price, which he guaranteed would be less than the marked prices.
Desert willow blossom
The desert willows we saw were just barely OK: alive, but none of them had a decent branch structure. When we asked if they carried Sonoran emerald or Desert Museum paloverdes, he actually tried to tell us the sickly trees billed as “hybrid” paloverdes were Sonoran emeralds. Only one of the Desert Museum specimens was acceptable, and it had a “sold” tag on it.
My son pointed out that the Meyer lemons appeared to be diseased. The salesman tried to tell us it was nothing: “just” thrips, which all lemon trees supposedly get—”they’re in the air and there’s nothing you can do about it.” (Odd. Wonder why neither of my lemon trees have picked this up out of “the air.”)
Then, in true car-lot fashion, the guy got his “manager” in on the pitch. We were told that we had to buy a batch of trees right now if we wanted to get this fantastic price: $115 a tree, plus tax. They actually used language to the effect that they had to “get these trees off the lot.”
Right. Before they die here instead of in your yard…
When we said we wanted to check some other nurseries before making a decision, the manageroid announced that if we left without buying, the miraculous offer would no longer apply.
That was fine, said M’hijito; ‘bye!
Instantly the guy changed his tune and said if we wanted to look at other nurseries, that would be fine; they would match any other nursery’s price. But we would soon find that no one else had stock as good as Moon Valley’s.
So it was into our broiling chariot for a long drive across town to Baker’s.
Baker’s has a reputation for priciness, but it’s the best nursery I’ve found in the urban area, except maybe for Harper’s, which has followed the white flight to the far East Valley and so is no longer reasonably accessible to people who have stayed in the central city.
Instead of being pounced, here we had to approach an employee and describe what we wanted. He took us to an absolutely gorgeous emerald paloverde. The Meyer lemons were in excellent condition, with no sign of disease or mysterious airborne “harmless” insect infestations. And, interestingly, he suggested we might consider waiting to buy until the worst of the heat has passed, since transplanting the trees out of their pots stresses them under the best of circumstances and could kill them in 115-degree weather.
The price for 24-inch trees? Eighty-five dollars.
Some difference, eh? You can imagine where we’ll be buying the trees. If you live in Arizona or Nevada, run, don’t walk, away from Moon Valley Nurseries!
Takeaway messages for readers everywhere:
• As soon as a sales rep starts to high-pressure you, flee! • Before opening your wallet, always, always, always go to more than one retailer and get bids from more than one service provider.
From The Atlantic Monthly comes a précis of a recent study [1] published by Cornell University’s Johnson School reporting that consumers tend to see a precise price, such as $355,756, as a better bargain than one that ends in zero, such as $355,000. When asked which was lower, subjects consistently responded that the precise figure was cheaper than the round number.
Not only that, but at least in real estate, a zero at the end of a listing price works to lower the sale price. If you live in South Florida and list your home at a price ending in at least one zero, your final sale price will be about .72 percent less than that of a house listed at a similar price that doesn’t end in a zero. Three zeros will make it .73 percent lower, and for each additional zero, the price will drop another .39 percent. Doesn’t seem like much, but every little .72 percent counts: for the $355,000 house, that’s $2,556.
The strange psychology of pricing is well known to all of us who shop in stores where prices end in 98 cents. Retailers have long recognized that when confronted with a $15.98 item, buyers think the object costs $15, not $16. So, for that matter, do the sales clerks. Once in a household goods store on the order of Linens & Things, I happened to remark to the sales clerk that thus-and-such a gadget was $16.
“Oh, no!” she exclaimed. “It’s $15.98.”
“That’s the same as $16,” I said.
“No,” she insisted, “it’s $15.98.”
“Well,” I insisted back, “$15.98 is only two pennies less than $16. It’s pretty much the same as $16.”
She actually had to think about it for a moment. Finally she allowed, “Yes, I guess it is.”
What does this mean for the frugalist? Round up! Round up to see the real price. And in the real estate market: pay attention if you’re a buyer. If you’re a seller, for heaven’s sake come up with a price that ends with a digit between 1 and 9.
1Manoj Thomas, Daniel H. Simon, and Vrinda Kadiyali. “Do Consumers Perceive Precise Prices to Be Lower Than Round Prices? Evidence from Laboratory and Market Data.” Johnson School at Cornell University Research Paper No. 09-07, September 2007. January 10, 2007. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1011232.
